Two farmers harvest pepper in Binh Phuoc province. (Photo: VNA) Hoang Thi Lien, Chairwoman of the Vietnam Pepper Association,estimated that Vietnam exported roughly 211,500 tonnes of pepper in the first11 months of 2022, raking in 911 million USD. Europe remained a major importerof Vietnamese pepper, taking about one-fourth of the pie.
As the country has entered into a free trade agreement withEurope, the pepper has become better positioned in the market. In the shortterm, EVFTA is expected to give it huge tariff advantages over its majorcompetitors, including Indian and Malaysian pepper.
However, Lien urged pepper firms not to take the advantages forgranted as Europe has begun to raise the bar on imported pepper. Moreover, somecountries are slated to strike their own FTAs with Europe in the years to come,further eroding the advantages.
"Firms need to improve themselves constantly to adapt to higherstandards in the market," said Lien.
The chairwoman also forecast that the demand for Vietnamese pepperwould soar in Q2/2023 on the back of China's less restrictive stance onCOVID-19.
Nguyen Nhat Minh, a representative from Vietnam Insight, saidEurope is one of the largest pepper importers in the world, consuming one-thirdof global pepper exports. In the next five years, the market is expected togrow by around 2% annually.
Vietnam is one of the four countries in Asia that have signed FTAswith Europe. As the EVFTA has come into effect, Vietnamese pepper enjoys apreferential tariff of 0%, putting it at a huge advantage over pepper fromnon-FTA countries.
However, tariff cuts are only part of the story. In fact, theFTA-induced advantages normally come with specific technical barriers to trade.Such barriers include strict regulations on Maximum Residue Levels (MRLs) andSanitary and Phytosanitary Measures (SPS) applicable to pepper.
"Pepper imported to European markets is required to come upto European standards. It must be safe for consumer health, clearly labeled,and free of impurities," said Minh.
Luong Phuoc Vinh, Southeast Asian Regional Manager of TentamusGroup, asserted that a closer tie between firms and farmers is needed to keepoutput stable and increase the proportion of processed pepper in total exports.
He urged Vietnamese farmers to shift from a quantity-focused to aquality-focused mindset to help Vietnamese pepper gain ground in the demandingEuropean markets.
He also said it is tough to bring Vietnamese pepper to Europe, butit is tougher to get it to supermarket shelves as supermarkets set the bar onimported pepper higher than the bar set by European authorities.
"For instance, the maximum residue levels of certain agentsin pepper are set at 0.1% by European authorities. Supermarkets, meanwhile,require maximum residue levels of 0.07 %," said Vinh.
Pham Minh Thong, General Director of Phuc Sinh JSC, believed thatthe commitment to sustainable development would hold the key to commercialsuccess in Europe. It is the case because European consumers prefer asustainable way of production and consumption.
"If firms do not have a sustainable mindset, consumers wouldturn their back on them," said Thong.
The general director urged Vietnamese firms to shift their focusto extensively processed pepper to strengthen their position in global markets.He took freeze-dried pepper as an example, which can be sold at a price sixtimes that of ordinary black pepper./.
VNA
